The Childish Babbling of a Say...

Duncan Foley (2006), Adam's Fallacy: A Guide to Economic Theology (Cambridge: Belknap Press: 067402399).

It must be a theology book, for Duncan Foley has worked a miracle, a dark miracle. He has created in me--me! J. Bradford DeLong!!--something that I thought would never happen: the desire to say something good about Jean-Baptiste Say.

Foley has done this with a book that claims that Adam Smith holds to a:

P. 3: moral fallacy... urges us to accept direct and concrete evil in order that indirect and abstract good may come of it... [while] neither Smith nor any of his successors has been able to demonstrate rigorously and robustly [how].... Smith's rationalization... requires... wholesale denial of the real costs of capitalist development...

Let's get this clear. Foley thinks that it is immoral to weigh "indirect and abstract" goods that come from capitalist development against "direct and concrete costs": that doing so is "wholesale denial of the real costs of capitalist development." That is what Foley calls "Adam[ Smith]'s Fallacy."

What are these real costs? Let's read further, beyond page 3. Division of labor... Advantages of the division of labor... Detail and social division of labor... Division of labor and extent of the market... The Virtuous Spiral of Economic Development... "Say's Law." Ah. Here we are, on page 10: Foley comes to the first real cost of capitalist development about which Adam Smith is in "wholesale denial": technological unemployment:

P. 10 ff: The increasing division of labor with its consequent rise in labor productivity has at least one immediate negative effect: a reduction in the demand for labor in industries undergoing rapid rises in productivity. The reason for this is that the increases in the productivity of labor may run ahead of the widening of the market. Even though more units of the product are being produced and sold, if labor productivity is rising ever faster, fewer workers will be required to produce the output, and unemployment can result.

Smith acknowledges this effect... but argues, on the basis of reasoning that later came to be known as "Say's Law," that in the aggregate there cannot be a chronic excess supply of labor.... The reasoning... is... that the source of demand for commodities... is just the willingness of workers and the owners... to make their resources available for production. In real life, this potential demand can become effective only if money is available to finance the start-up of production.... Smith and his successors who reason on the basis of Say's Law are assuming that the financial system... is flexible enough... belie[ving] in the efficiency of the financial institutions of a capitalist economy.

This is Adam [Smith's] Fallacy in action. The immediate effect of increases in labor productivity is to impose costs (unemployment) on a group (workers) who are in a weak position to protect themselves from these costs. Ordinary moral reasoning would regard this as a bad thing. Smith offers the hope that some of these displaced workers will eventually find alternative jobs (though some others may not), and that lower prices of products will benefit consumers of products. Thus the direct, concrete evil of unemployment is instrumental to achieving the indirect, abstract good of lower prices...

Where should we start? He talks about "Adam [Smith]'s Fallacy," so I guess we should talk about "Foley's Follies":

Foley's Folly #1: The assertion that the costs of higher labor productivity are "direct, concrete" while the benefits of higher labor productivity are "indirect, abstract." Lower prices that give consumers higher real incomes are exactly as concrete and as direct as are income losses from unemployment. The best thing you can say about Foley's claims that these benefits are in some way "abstract" and "indirect" is to say that you could grow really good tomatoes if you spread his claims around their roots.

Foley's Folly #2: The claim that technological unemployment is the rule. More often than not, a rapid rise in labor productivity in an industry is associated not with a reduction but an increase in demand for labor in that industry. That was certainly the case in the steam-machinery-cotton complex in Manchester at the start of the industrial revolution, or the steel-rubber-gasoline-automotive complex in Detroit at the start of the twentieth century. That is certainly the case in the silicon-electronics-computers complex in Silicon Valley over the past two decades. I don't know where Foley's claim that technological unemployment is the rule in fast-productivity-growth industries could possibly have come from.

If the elasticity of demand is low, rapid technological progress in one industry might be associated with a reduction in the demand for labor in those industries. But it would not be if the elasticity of demand is high. For Foley to say that this technological unemployment in low demand-elasticity industries is "one immediate negative effect" of the division of labor without also saying that technological employment in high demand-elasticity industries is "an additional immediate positive effect" of the division of labor--that's Foley putting his thumb on the scales in a foolish way.

Foley's Folly #3: The assertion that a belief in the theoretical truth of Say's Law--in the efficiency of financial markets--is necessary to support the claim that the market system is for the general good. Say's Law certainly does not hold anywhere in the short run. That's why we have the Federal Reserve--an island of central planning in the middle of our economy to try to ensure that even though Say's Law does not hold in theory in the short run, we can make a not too intolerable approximation to it hold in practice.

Foley's Folly #4: Duncan Foley's calling a belief in efficient financial institutions "Adam [Smith]'s Fallacy in action." Adam Smith was well aware of financial market failures and thought hard and carefully about them--witness II.2 of the Wealth of Nations. Giving real people's names to straw men of your own devising is impolite. That Keynes did it to Pigou and company is not an excuse.

Still worse, in my view, is Foley's Folly #5: It turns out that Duncan Foley doesn't believe that technological unemployment is the rule. Immediately after this song-and-dance about the "direct, concrete" costs that labor productivity growth generates via increased unemployment, costs that "ordinary moral reasoning would regard... as a bad thing," Foley writes:

Over long periods of time... something like Say's Law does operate... there is no long-term drift towards constantly increasing unemployment as a result of technological change...

Unless Foley wants to maintain--which I don't think he does--that in the absence of technological progress we would have steadily falling unemployment, what he is saying here is that unemployment is not higher as a result of technological progress. There is no cost to charge against the benefit of higher productivity. Technological unemployment is a non-issue. And I cannot understand why Foley raises it--let alone introduces technological unemployment as his first example in his book of the "real costs of capitalist development" about which Adam Smith is in "wholesale denial."

At this point, at the bottom of page 11, Foley seems to recognize that something has gone wrong. He immediately reverses course:

On the other hand, over shorter periods, the absorption of technologically unemployed workers into new jobs can be quite slow, creating real social, economic, and political problems. The stubbornly high unemployment rates in many Western European economies over the last three decades of the twentieth century are an example...

Which is Foley's Folly #6. I don't think I understand high Western European unemployment. But I do not think that the first-order cause of high Western European unemployment was rapid labor productivity growth. If high Western European unemployment were primarily technological unemployment, it would have been highest in the 1960s and early 1970s when European productivity growth was fastest, not in the less technologically dynamic 1980s and 1990s.

Foley does his readers no good service in holding up Western Europe since 1975 as an example of technological unemployment.

I must say that I thought that the day when I would have a good word for Jean-Baptiste Say would never come. But by the time I had finished page 11 of Adam's Fallacy, it had.

Comments

[Kimon]

Well, if you assume Foley is trying to describe skill-biased technological change in the most confused way possible, then he might have a point ;)

[Rich C]

Well, Brad, let's take a look at your examples. According to the BLS, the highest level of employment in "computer and electronic products" occured in 1990 (at about 1 million). Despite the fact that productivity in this sector increased about 10x (essentially montonically) from 1990 to 2004, employment in the sector fell to about 650,000. That said, most of the fall occured during the first half of the 1990s and the 2000-2004 period. Nevertheless, productivity increased rapidly in this sector during both periods when employment fell sharply. Even when employment grew in between (from 1994 to 1998) it never regained its 1990 level.

I can't figure out how to make the BLS give me genuinely historical figures, so we have to look at the auto industry over the last 15 years. However, during this period, productivity increased smartly, by about 75% overall. However, employment in motor vehicle manufacturing fell from about 275,000 to about 200,000. That said, there was a brief spurt of increased employment from 1994 to 1996, after which employment in the sector began to decline first slowly (through 1998) then quite sharply.

I haven't got Foley's book, but I think Brad is overreacting here: what he quotes Foley as saying seems little different from Keynes - it is possible for there to be involuntary unemployment under capitalism, and there is no automatic, self-correcting, market mechanism that will push the system back to full employment. Rising productivity that does not translate into increased effective demand is one of the ways this can happen. I suspect that Brad has misread Foley with respect to the idea of an efficient financial system - I don't think he's referring to the efficient markets hypothesis, but instead implying that the purpose of the financial system is to transfer funds from surplus to deficit units, and a system that pulls off this transfer quickly and with little leakage (read unproductive speculation) will be more efficient than one which does so slowly or with much leakage.

[Jon Fernquest]

"The increasing division of labor with its consequent rise in labor productivity has at least one immediate negative effect: a reduction in the demand for labor in industries undergoing rapid rises in productivity. The reason for this is that the increases in the productivity of labor may run ahead of the widening of the market."

Part of labor productivity in technology intensive jobs is keeping one's skill set up to date. The notion that productivity causes unemployment is just perverse (and not very productive). If you were a DOD supported ADA programmer in the aerospace industry during the last convulsions of the Cold War, you had a cushy sinecure. Post cold war you are persona non-grata in a world of technology that has simply left you behind. If you became a programmer or lab tech in the medical-healthcare industry or some allied research field in genetics for instance you would have had more staying power in an industry protected from the business cycle and Schumpeterian creative-destructive effects on the labor market. The aerospace ADA worker might be later employable as project manager, based on higher order familiarity with technology and technology projects, and maturity, or maybe they won't refocus and adjust their skills and end up as a taxi driver, life insurance salesperson, or janitor, remaining ever-vigilent about one's own long-run productivity goes hand in hand with tech jobs, making sure one is not slipping slowly (and comfortably) into antiquatedness. (EDUCATION again, continued lifelong EDUCATION) I sure wish there were some labor specific **ethnographic studies** (without ideological spin) to back up econ labor stats, so one could get a handle on the forces driving them. The Lawrence Katz paper referenced during the David Brooks critique had an overly simplistic clerical model of how technology affects work.

I remember one job I had as a computer consultant, a refinery in Indianapolis, they still used big IBM tape drives to sort data and write reports instead of a hard disk, in 1990!, everyday they would go to the steak house in this shag carpeted van, smoke like chimneys all day long in the office, and play golf all day on the weekends, shortly after which they were unemployed. It wasn't really their fault though. The American educational-cultural matrix simply did not provide them with enough opitions or imagination.

[monkyboy]

Econ professors at China's top schools make $600 a month:

http://tinyurl.com/fwm3f

I bet when these guys start providing American students with econ degrees via the internet...

...American econ professors will come up with some interesting new theories while standing in the unemployment line.

[liberal]

Adam Smith was indeed a great moral philosopher and the greatest economist of all time.

Too bad modern neoclassical economists don't more carefully examine his work:

"Both ground-rents and the ordinary rent of land are a species of revenue
which the owner, in many cases, enjoys without any care or attention of his
own. Though a part of this revenue should be taken from him in order to
defray the expenses of the state, no discouragement will thereby be given to
any sort of industry. The annual produce of the land and labour of the
society, the real wealth and revenue of the great body of the people, might
be the same after such a tax as before. Ground-rents and the ordinary rent
of land are, therefore, perhaps, the species of revenue which can best bear
to have a peculiar tax imposed upon them." (Wealth of Nations, Bk 5, Ch 2,
Art 1)

[Arjun]

Brad,

I dont understand your problem with this. Is this not very closely analogous to the argument over free trade? A group of workers lose their job (a direct concrete loss to them), even if the entire country benefits from lower prices from imports (an indirect abstract benefit). Lots of people have argued this. Foley doesnt deny that there is a benefit, nor does he claim that the benefit is lower than the cost, he simply challenges the idea that there is an automaticity in the re-employment of labor. In the free trade analogy, for example, the bankrupting of a generation of mexican corn farmers did not lead to their complete absorption into their own growing industries. Similiarly, is it necessary (or the rule) that high productivity leads to higher employment? It seems an empirical question, and not one to dismiss out of hand. After all, as Foley notes, there are forces that do restore Says Law

[Rich C]

Arjun: that's an excellent analogy. But I think that Brad will be more receptive to arguing that the benefits of free trade - or any other price-lowering change - are "diffuse" while the costs are "concentrated". Part of what has put Brad in an ill-temper here, I think, is Foley's language, particularly the marxisant contrast of "concrete" and "abstract." "Diffuse" and "concentrated" do the same work vis a vis Foley's (or your) argument, but are less likely to unleash Bad Brad.

[Tim Bray]

In the Eighties, I was an employee of a successful computer company, and was frequently assigned to install and configure new computers. I noticed a repeating pattern where one of the consequences of the new installation was that a bunch of people would be laid off; those who ran the now-obsolete keypunch pool, or the radically-downsized mail-room, or whatever.

Just anecdotal, and of course it's perfectly possible that they all soon got happy rewarding jobs doing something else. Still, it made me think.

[Donald A. Coffin]

One can have a lot of bad things about Jean-Baptiste Say, and Joseph Schumpeter said a lot of them (something to the effect of Say's having discovered a theorem on real importance that Say neither understood nor used properly for the things that were important to him).

I always thought Say's Law of Markets was a long-run proposition, the point of which is that there is no restraint placed on growth by the possibility of deficient demand, because, in the long-run, demand could not be deficient. I never thought he was proposing a short-run proposition that denied the possibility of unemployment .

[David Lloyd-Jones]

I've met, and debated against, a clone of this guy: the Minister of Toronto's reddest church, the excellent, medium-high Anglican, Holy Trinity. When I was a Christian, (that was up until roughly twenty years ago; Chag sameach l'Rosh Ha Shanah, landsmen!) I took part in Christians In The NDP, a left-wing think and debate group at St. Bartholemew's, and was assaulted by views of this type from a plurality of the group at every turn.

Duncan Foley has probably done us all a favour by collecting in one place all, or at least most, of the things believed by the dumb section of the left.

[Colin Danby]

Commenters might more carefully note that Brad spelled out the key condition -- low elasticity of demand for its output -- under which rising productivity in an industry can unemploy some of its workers. What's less obvious is how pockets of such unemployment affect the larger unemployment rate, the gap in reasoning and evidence the post emphasizes. Nobody is arguing that Say's law holds in the short run.

Technological unemployment is *not* part of Keynes' analysis. Keynes saw higher productivity as a boon. You can try and make a theoretical synthesis if you like, but Keynes' contributions are around the interaction of production and financial markets.

RichC also seems confused in the last para of his first post -- Brad simply quotes Foley on Say. Nobody here is saying the financial sector plays this role.

To pick up on David L-J, this is a perennial argument because it's an appealingly simple inversion of what seems to be capitalism's greatest strength, the rapid rise in productivity that has made many things much cheaper and allowed us to do exciting new things like yammer on the internet. I join you in finding the anti-productivity arguments weirdly recalcitrant to reason. But let's not forget that some people will get badly hurt and not everyone has easy access to education and mobility (one reason those of us who support freer trade should also support easier migration). I think people who worry about that damage often hear the pro-trade, pro-productivity argument as callous indifference to people who get hurt.

Smith, finally, has a more complex position on this than Foley apparently gives him credit for, but that might be another thread.

[Barry]

In terms of rapidly growing employment of the 'steel-rubber-gasoline-automotive complex in Detroit at the start of the twentieth century.', that was when that complex was *created*. As has been demonstrated above, both with Detroit and IT, increasing productivity can co-exist with declining employment for decades-long periods.

[shah8]

Isn't the bad part of productivity increases due primarily to the low elasticity of capital supply? Aren't all increases in productivity based on increases in capital, the most basic of which is knowledge? Does this not dive, pretty much straight on, to certain basic marxist arguments?

only learning here. I was thinking focus on demand flawed. Viewed the changes in *options* available to the parties as more key rather than exchanges of goods and services...

[Robert Waldmann]

you write "Foley's follies" so I will discuss Brad's Bad point
"Unless Foley wants to maintain--which I don't think he does--that in the absence of technological progress we would have steadily falling unemployment, what he is saying here is that unemployment is not higher as a result of technological progress. "

Uh uh. "Higher" and "rising" are not synonyms. It is entirely possible that unemployment would be roughly constant at a low level without technological progress and at a higher level with technological progress. Two constants but not two equal constants.

In fact, one would expect the level of frictional unemployment to be higher in an economy with creative destruction than in one with stagnation. Even if employment rises in each industry, economic progress involves new firms being founded and old firms going bankrupt. That's part of what makes capitalism different from feudalism.

Also, your criticism of Foley's 2nd folly is much too gentle. Consider 3 key words which show he is being dishonest. "has ... may ... can" Indicative then subjunctive. How odd.

Foley does not claim that "technological unemployment is the rule." He asserts that occurs whenever their is a rapid incease in labor productivity. The only qualifier in his assertion is "undergoing rapid rises in productivity". Of course he knows this claim is nonsense, so when he pretends to defend his claim he equivocates shamelessly talking about what "may" or "can" happen. He does not have a different opinion than you about which fraction of industries with "a rapid rises in productivity" experience falling employment. He argued dishonestly. He knows that many people believe in the lump of labor fallacy, so if he hints at it, they will assume it is true even if he immediately qualifies his claim (with the vaguest possible qualifiers) so that he can't be accused of believing it himself.

This trick is exactly the one used by George Bush who always mentioned 9/11 when asked about Saddam Hussein, but was careful not to directly claim that Saddam Hussein was involved in 9/11.

There, was that harsh enough to make all readers tempted to agree with Foley (who is by the way a brilliant economist) ?

[Foley was a brilliant neoclassical monetary theorist. He would have to handle people like Adam Smith and Thomas Malthus fairly before I would say anything further.]

[Bruce Webb]

I had a lengthy post wiped out by TypePad. My loss, your gain. Here is a shorter version:

Brad's Folly #1: "The assertion that the costs of higher labor productivity are "direct, concrete" while the benefits of higher labor productivity are "indirect, abstract." Lower prices that give consumers higher real incomes are exactly as concrete and as direct as are income losses from unemployment."

Well this seems to ignore the fact that there is an interceptor between production cost and product price called "profit". Bill Gates did not get to be a billionaire by letting the cost of a Windows license by set by his marginal cost, Ford closing an expensive plant in Detroit for a cheaper non-unionized plan in Tennessee doesn't mean car prices will go down. Price is set by supply and demand and producers can and do manipulate each side of the equation to maximize profit. If you can keep demand strong and supply steady while cutting costs the difference goes right into the pockets of the producer. In the meantime people are out of work.

Brad's Folly #2:" The claim that technological unemployment is the rule. More often than not, a rapid rise in labor productivity in an industry is associated not with a reduction but an increase in demand for labor in that industry. That was certainly the case in the steam-machinery-cotton complex in Manchester at the start of the industrial revolution, or the steel-rubber-gasoline-automotive complex in Detroit at the start of the twentieth century."

There is a confusion here between industry and sector. I could take on Brad's examples but instead lets take some lower lying fruit. There is no doubt that in the early years of mechanical reaper production employment in the industry jumped from zero to thousands. But the net result in the agricultural sector was massive worker displacement. You can make a very good case that modernization is synonomous with transformation of a population from being primarily agrarian to primarily industrial. And at just about every stage you see a combination of increased production with a reduction in labor participation.

Anytime you have a fundamental change in technology you will get sharp percentage increases in employment in the successor technology, that is what happens when you start from zero. But equally you need to look at the workers in the displaced technology. Brad's examples are perfect examples of this cherry picking. Peasant women used to generate income spinning thread in their homes, to this day a single woman is known as a spinster. That income source and that working population simply vanished in the face of the steam-machinery-cotton complex in Manchester. And as for Detroit, well I expect the corridotrs of Evans are thronged with the ghosts of carters, smith, stableboys and coachmen whose jobs vanished with the automobile.

"I don't know where Foley's claim that technological unemployment is the rule in fast-productivity-growth industries could possibly have come from."

Hmm, history books? Agriculture is the easiest example but Transportation and Communication offer good cases as well. "What the canals and the railroads and washing machines and automated switchboards eliminated whole categories of workers? Who knew?"

That mordant chuckle you hear is the ghost of the buggywhip maker joking with the ghost of the local washerwoman.

[Duncan Foley]

Just, as Brad suggested, to get things clear:

I use "Adam's Fallacy" in the book to refer to two things. First is Adam Smith's claim that the pursuit of self-interest, which is morally problematic (not necessarily immoral, but in need of examination) in most human interactions, is unambiguously a social good in the context of competitive market interactions.

Second, I take this problem as representing a deeper issue that runs through Adam Smith's writing and the work of all the political economists I discuss in the book. This is the idea that there is an economic sphere of life subject to special laws, either moral or scientific. The book makes an extended case that this "fallacy" (which is not just Adam's) runs through the history of political economy and economics.

Whether or not I actually committed all of the Follies Brad identifies I leave to readers of the book to judge.

I think the way Smith uses Say's Law reasoning to support his analysis of free trade is a fair example of the way "Adam's Fallacy" works in his discourse. The discussion links up with the chapters on Malthus and Ricardo, Marx, and Keynes.

There is a broader issue about the impact of labor productivity increases on society, which is the "destructive" aspect of Schumpeter's "creative destruction". Cost-reducing technical change may not reduce employment in the sector in which it occurs, but it can have (and has in many cases) devastating effects in other sectors and economies. It is hard to look at the polarized world economy today without acknowledging this.

I don't think the lack of a long-run trend in unemployment in and of itself can settle the question of Say's Law, at least in the form "aggregate supply in the willingness of input owners to sell their resources creates its own aggregate demand", because in the long run the aggregate supply of inputs is adjusting, along with aggregate demand. The classical and Marxian analyses of macroeconomics, in which population is endogenous, are a good example of this.

I did not, as I say in the Preface, write the book to be "fair" to Smith or Malthus or anyone else. (As far as I can tell, all these guys are doing fine without my help.) I did write it to raise questions and prompt debate about the presumptions of economic policy discourse. I'm glad Brad de Long has taken me up on this and generated this discussion.

[Colin Danby]

I guess I'll have to read the book, but I'm curious about the first two paragraphs in Foley's courteous reply above. Smith indeed thinks of self-interest as problematic but works out in _Theory of Moral Sentiments_ the *overall social conditions* (not narrowly economic!) in which it can be contained; the (well-socialized) self-interested person of _Wealth_ is to be read in that context. Where's the text in which Smith says it's the "context of competitive market interactions" that makes self-interest "unambiguously a social good"?

I'd happily join Foley in opposing the reification of the analytic split between economic and non-economic, but Smith is not the guy I'd go after. Ricardo and Malthus, maybe, Marx, no, Keynes, only mildly.

[andres]

Hmmm. In reply to Duncan Foley and Colin, I think I can add that the position that Smith unambiguously favored/gushed over self-interest is a fallacy. However, Smith was mildly at fault in two things: (1) in assuming that people who read _Wealth_ would also be grounded in _Moral Sentiments_ or some similar ethical theory, and (2) in not explaining that there is a massive institutional transformation that perverts the effects of self-interest when one goes from the village baker and butcher on one hand to the accountants and tax farmers of the East India Company on the other. The failure of modern-day Milton Friedmans and other neoclassicals/libertarians is that they have no conception of the social processes by which a night-watchman government gets transformed into a patsy for all sorts of unspeakable, profit-driven criminality.

In that sense, I think Duncan Foley commits a tactical mistake in focusing first of all on the economics profession's callousness towards technological/structural unemployment, which is actually one of the least of the negatives of modern capitalist economies. First, because it is too easy to twist the argument into "increased labor productivity is bad" which is a ridiculous straw man, and second because Say's Law is used today (and not by Smith back then) to paper over the far more troubling question of whether there could be _systemic_ unemployment not caused by technical progress.

Btw, it is ironic that Ricardo's _Principles_ chapter on Machinery actually supported the opposition of workers to mechanization, especially in the textile industry--clearly, Ricardo didn't believe that workers displaced by mechanization would be magically teleported to a new workplace with an equivalent salary. Not what you would expect from the economist who popularized Say's argument to the point of turning it into Marx's "childish babble". In fact Smith was being naive in using Say-type arguments to gloss over technological unemployment, but this is a rather unimportant point in light of the debates which came afterwards.

[Barkley Rosser]

I find this whole thread a bit disconcerting, especially a lot of the comments. I have not read this recent book of Duncan Foley's, and my sense is that few of the commentators have either, although I presume that Brad Delong has read it through before dumping all over it. In any case, he provides some very skimpy quotes, possibly taken out of context, which he then gets all worked up about, a overly so as near as I can tell, although he appears to score on some points.

I guess I am most annoyed with Robert Waldman's perhaps well intentioned but apparently snide remark about how Duncan Foley "was" a "brilliant, neoclassical monetary theorist," thereby appearing to suggest that what he has done more recently is not particularly brilliant. It is true that Foley has not been much of a neoclassical, so that those who think that only neoclassical economics is any good, will probably think ill of his work. However, I would suggest that this is a rather unfair and unreasonable way to proceed, although perhaps Waldman was only trying to be nice and simply does not know much of Foley's more recent work.

Again, I have not read this most recent book, but I did read Duncan Foley's _Unholy Trinity: Labor, Capital, and Land in the New Economy_, from a few years ago. I even wrote a book review of it that appeared in the Journal of Economic Behavior and Organization in January 2006, vol. 59, no. 1, pp. 151-154. I largely praised it.

More relevant to this discussion is that he had a lot to say in there about Smith, Ricardo, Malthus, and Marx. I thought his expostions and analysis of their work in that book was very well done, knowledgeable and thoughtful. Perhaps he has made mistakes or said silly things in this new book, but I am inclined to suspect that most of what he has to say is also pretty thoughtful and knowledgeable. Duncan may not be kissing the hind end of neoclassical orthodoxy these days, but he is still one hell of a smart, insightful, scholarly careful, and knowledgeable economist.

[Barkley Rosser]

Oh, and while we are at it, the apparent conflict between the "immorality" of the Wealth of Nations and the "morality" of The Theory of Moral Sentiments is one of the longest running old chestnuts of the history of economic thought. It even has a name in that field: "The Adam Smith Problem." Enormous amounts of ink has been spilled on enormous amounts of paper attempting to resolve it over a long period of time, without a definite resolution, despite various claims. BTW, The Theory of Moral Sentiments is very fashionable again, especially in behavioral econ circles.

[Stephen Diamond]

Brad, Wouldn't it have been possible for unions to have blocked and delayed the full impact of technology induced unemployment on Europe?

[Dipankar Basu]

Here is a detailed rebuttal of Brad's criticism of Adam's Fallacy:
http://radicalnotes.com/content/view/31/30/

[SelfDefense4Traders]

Brad, it is good to see that among the many strongly voiced and opinionated verbal people around, that you have the open-mindedness to stick with truths and not just a person or group. Cheers!